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A few weeks ago, I wrote a piece called "The ESG Mafia", where I compared today's ESG market structure to that of a crime family. At the head of the ESG Mafia is, unsurprisingly, BlackRock, the $8 trillion asset manager with omnipotent market power.https://frontmonth.substack.com/p/the-esg-mafia
Last week, a USA Today op-ed came out from Tariq Fancy, former head of Sustainable Investing at BlackRock. Not only was Fancy an executive at Wall Street's most powerful firm, he was head of ESG, the firm's future. He was a Don in the ESG Mafia.https://www.usatoday.com/story/opinion/2021/03/16/wall-street-esg-sustainable-investing-greenwashing-column/6948923002/ …
In this op-ed, Fancy paints a brutal picture of the ESG industry. In his own words, "sustainable investing boils down to little more than marketing hype, PR spin and disingenuous promises from the investment community." Coming from him, this means a lot.
The cynics among us aren't surprised. Did we REALLY think BlackRock and the rest of Wall Street had embraced ESG for any other reason than profit? Maybe there was hope that the movement would bear even some fruit. Fancy's op-ed crushed any hope of that, at least for me.
Fancy isn't the only one sounding the alarm on ESG. Academics have chimed in, saying ESG investing is a ruse because there is NO WAY to measure if it's actually working. One of the many reasons - ESG funds prioritize point in time metrics over trends:pic.twitter.com/ymKkz9xjhB
If Fancy just invalidated an entire new industry of investing, why isn't this making bigger headlines? ESG inflows will eclipse new highs this year & become a multi-trillion dollar business. How can the ESG Mafia get away with what they're doing?
The industry is persuading investors young and old that buying their products can change the world. Not only will clients make enough returns to retire, have minimal drawdowns and sustainable income, but simply parking money in their fund can ALSO make the world better.
We're being trained to expect too much from our investments & their handlers, and we don't want to wake up to the possibility that it's all too good to be true.
TLDR: Don't buy into the ESG hype. The former head of the ESG Mafia is telling you as much. Don't think that just clicking "buy" will solve all your problems. Making money takes work. Changing the world takes work. Wall Street is not the savior of the world.
I'll be putting more thoughts out there on the ESG Mafia and Fancy's op-ed in a future newsletter post. Check it out below so you don't miss it:https://frontmonth.substack.com/
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